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February 21, 2013

Ultra-Wealthy Investors Feel Financially Insecure

More communication needed to assuage fears, instill confidence

Despite their extensive wealth, a poll released Thursday by SEI Private Wealth Management of ultra-wealthy Americans found that regardless of their current level of wealth, respondents would need twice that amount to feel financially secure. Younger respondents (those under 50) felt they would need at least three times their current wealth to feel really secure.

In light of those fears, advisors may be underserving their ultra-wealthy clients. SEI found nearly half of respondents felt “isolated” when making financial decisions.

Scorpio Partnership surveyed more than 160 respondents with an average $11.8 million in financial assets for SEI’s poll. SEI Private Wealth Management focuses on investors’ concerns rather than advisors’ and declined to comment on the survey results.

Nearly 40% of respondents said they felt more confident when their advisor guided them on difficult financial decisions, but 57% said they didn’t think their advisor was giving them all the information they needed to assess risk.

“The results show that many investors feel isolated when making financial decisions,” Michael Farrell, managing director for SEI Private Wealth Management, said in a statement. “The challenge is trying to balance the need for external input with clients’ instincts to take the lead on family decisions, financial or otherwise.”

Farrell stressed that “frequent and meaningful communication” was important to give clients all the information they need to make decisions confidently. “Hopefully in doing this,” he said, “the client will feel more connected and more informed when assessing financial decisions.”